25Aug
Tips to attracting an investor

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angel investorAt each stage of its life cycle, a startup needs funding. No matter how great the idea is, its implementation requires certain resources, both financial and material. Thus, each startup gets to thinking how and where they can attract such resources. So, let’s see what startups need and what they can do to get it.

Angel Investors and Venture capitalists are often mentioned together when talking about gaining capital for your company however, they are very different. An angel investor is a individual who uses their own funds to invest in a business. Usually they are successful business people. Venture capitalists funds a business with a pool of money from a professionally managed fund. Angel investors are  individuals who contribute their personal money to support startups they find promising. Their primary interest is not only in receiving the return on their investments but also in wanting to keep the pace with the current trends and to share their expertise with younger entrepreneurs.

Venture capitalists, on the contrary, are companies and funds whose financial assets belong to other corporations or funds. In other words, they are responsible to their partners for the money they are prepared to invest into an idea, and this fact influences the approach they take to startup financing.

  1. Finding connections

The best way to get the attention of an investor is through a mutual connection. Investors don’t want to meet you, they want to be introduced to you. They come by many start-ups just like yours bombarding their emails and voicemails. In order to get ahead of everyone else, the best way to attract an investor is by finding a mutual connection between the two of you and use that as your in. Being introduced to an investor through this mutual connection will give you a much better chance at getting a meeting with them or even to have them answer your email. Out of the many start-ups that come their way, the one that will peak their interests is the one that was referred to by someone they know and trust

  1. Use your Network

Surrounding yourself with the right people will become useful to you and your start-up. Creating a network filled with credible people and other entrepreneurs will be advantageous because you can turn to them for help, or they can point you in the right direction. This will serve as an extremely beneficial tool. You can create a network of people by attending workshops, start-up events (ie Startupfest), accelerators or really any networking events. There are so many different events you can attend to that are made specifically for networking. So get out there and make as many connections as you can because you will not regret it.

3.      Find an investor that is also a partner, not just a check

It’s important to do research on the investors you want. You don’t want to reach out to an investor who has no experience in the industry your start-up is in. Firstly, you will be wasting your time reaching out to these investors because chances are they are going to turn you down. Second, it will become of more value to your start-up if you chose an investor who has a background that correlates with your start-ups industry. An investor who can help make your business stronger whether through advice or industry connections and knowledge will ultimately serve you better than an investor who has money to offer and nothing more. Look into each investor and research what other start ups they have invested in.

  1. Have co-founders

When you approach investors, you’re not just selling them on your product or service; you’re selling them on your team. Having a good team in place will increase the chances at gaining the attention of an angel investor. It gives your company a bit more credibility knowing that it isn’t backed by just you. Not to mention, having a good team is more attractive as each member brings a different background that can contribute to the success of the company. An investor will be ore inclined to invest in a company that is able to deliver in every aspect.

  1. Email

Once you’ve found your connectors, reaching out to them needs to be a sprint not a marathon. You need to set up the email in a way where you can get a quick yes or no response. Follow up within 4-7 days and if you get no response then you move on to the next person. Every email you send needs to be very clear and straight to the point. Everyone gets hundreds of emails a day so you need to be efficient with it. You need to have a clear killer subject line, make it short, forwardable. Give them an easy out therefore you get a quick yes or no response.

5Aug
Failing; a Checkmark to Success

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Ben Syne was the founder of Dog Sync, a
task management app for dogs with multiple owners.

Most every entrepreneur can provide a laundry list of errors and miscalculations. Failing is part of the course, but the most successful entrepreneurs actually benefit from their failures. It is their ability to learn from their mistakes and move forwards that significantly contributes to their professional and financial accomplishments. A little over 50% of start-ups fail in the first 5 years, it is a common occurrence yet nobody ever talks about it.

For many entrepreneurs, setbacks, which are for the most part, unavoidable, can become debilitating. But that need not be the case.

Ben Syne was the founder of Dog Sync, a task management app for dogs with multiple owners. It allowed owners to keep track of when the dog was fed, walked etc. DogSync was part of the statistics of start-ups that failed, despite this Syne looks back at this as a learning opportunity and shares with us how he overcame this. He shares with us what he learned and how he has evolved, which is something a lot of entrepreneur’s are unable to achieve.

  1. What motivated you to start DogSync?

At the time, my family and I faced this problem. We all had six different schedules and it was difficult to know who did what. It especially became an issue when our dog started taking medication because sometimes it would be given to him twice in a day.  I saw this problem and wanted to create a solution for it.

  1. When did you first start seeing warning signs in DogSync?

The initial warning sign was that our drop off rate started to increase.Our users were not taking to our app and we were not keeping our customers. We realized that there was not that many groups of people who cared for one dog and even for family members; there was always one person who would be designated to ensuring the maintenance of the dog.

Once we realized we were not getting enough traction, we decided to pivot into sometime entirely different which was called BarkMiles. With BarkMiles you earn points while walking your dog that got you discounts on your favorite dog products. That was doing well too except we had one major issue, cash flow. We took too long to bring our first idea to market. When we realized we needed to pivot, we started to run out of cash. We did not have enough cash to take it all the way and that’s the major thing that shut us down.

  1. Why do you think dog sync didn’t turn out to be successful/ what mistakes did you make?

The main thing that shut us down was that we did not have enough cash flow to take it as far as we could have. This was due to our poor management of capital over time. I think it would have also been useful to have check in every few weeks to look and reassess where our financial figures stood. Therefore, a big issue for DogSync would be use of finances and capital.

  1. Starting a business and failing at it can be very hard, how did you deal with it?

I have to admit it hurts a lot. I put a lot of my time into this and it was something I was very passionate about. Learning to meditate and achieving a calm state of mind was super important for me because it allowed me to look back at everything objectively. When things like this happen, it’s important to absorb and understand what’s happening because these are the best learning moments. When I start a business again, I do not want to trip over the same rocks I did the first time. Let the dust settle,  go back and look at the situation with fresh eyes. Failure is learning, and I try to take as much as I can from that experience because it was a very expensive one.

  1. What advice could you give to other founders who have been in the same position as you?

Don’t take your failure personally. Associating yourself to this failure will only make you think of yourself as a failure and it will not allow you to try again. It important to remember that the way you frame any bad situation will have a big effect on the outcomes of this event. If you read about successful entrepreneurs in the media, most of them have had 80-90% of failures in their careers and just a bit of success that took them very far. The thing that differentiates a successful entrepreneur is their ability to look back and grow from their failures, which allows them to come out better and stronger than everyone else.

  1. Do you regret starting dog sync

Absolutely not. It is almost as if it’s a checkmark on my path to success and I’m ahead of the game now. I look at this as an opportunity because I am only coming out better and smarter from this whole experience. Take for example, Ray Dalio founder of Bridgewater and one of the world’s top hedge fund managers. Early on in his career, he failed at the same thing three times in a row. He tried starting a fund and went bankrupt two or three times. It was because of those failures that he overcame and persevered through that made him as successful as he is today.

I do not look at dog sync like a failure because even during the process of it, I still learned an enormous amount. It has allowed me to evolve and come out smarter than before. Being thrown into these kind of situations allows you to learn eight times faster than if it were in any structured environment. I also had great people to work with and I would not have given up that opportunity up for anything.

  1. Do you think you will ever start another business in the future and or what are you currently working on
I have started another business; unfortunately, we are not at the stage of releasing any information. However, post dog sync; I spent some time working on the skills I thought were important to improve on before I started up another business. I was also waiting for some inspiration until an idea sparked and I began researching for 2 years. This is was a subject I had no previous knowledge on. I had to spend a lot of time researching and learning about it.  I got interested  in a completely different field, it was something I saw randomly on the web and it got me excited on an idea. This is something I will be launching this year.

 

  1. What lessons learned from dog sync will you be incorporating into your new venture

I realized having a coach or someone to check in with every week is something that is super valuable. I wish I did this for dog sync, but now I have a coach that I have weekly check ins with. It allows me to reflect on decisions, ideas and map out where business is at and where it should be. Having someone who can objectively give you feedback that is not emotionally invested in what your doing can help shape ideas and decisions. Being an entrepreneur, there are a lot of up and downs. It’s useful to have someone to talk to just to be able to see the whole picture. All top athletes have coaches and I think an entrepreneur having a coach brings the same value in order to be the best you can possibly be. I found my coach by putting an ad online and I received quite a few responses.

Management and planning are extremely crucial and is something that is worth sitting down and investing your time. Having a good management structuring goes a long way especially when you have a team under you.

Effective planning of resources, like I said a company dies when you run out of money so every decision should start with your team budget and what you’re going to be doing over time to achieve these metrics.

Every entrepreneur should take note on Syne’s ability to transform his failure into something positive. Being able to fall and get back up is one of the hardest things to do but once you do, you come out better and stronger. Don’t be afraid of failing because it’s only part of your journey to success.

19May
Make It Montreal

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PME co-founder Stephen Bronfman, CEO of Claridge, weighs in on what we’re learning from this pandemic, and the mindset needed to get us through:

We’re gonna have to bounce back, like a lot of people have. I’m a glass-half-full kind of guy; I believe in people. I believe in resiliency and strength. I know we’re gonna get through this, and we’re all gonna have learned a lot. A lot about the basics of life, about ourselves, about our environment, about health, about family, about unity, about teamwork. And about pride. And I think we Canadians, Quebecers, Montrealers, deep down have a lot of pride.

11Mar
Equity Split to Maximize Motivation

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equityWhen deciding how much equity split to give to a co-founder, your goal as CEO is to create a split that will maximize motivation. The amount of equity you give to a co-founder will determine the amount of work and energy they put into the start-up.

1. Its about what your co-founder wants

According to Michael Siebel, a common mistake  founders make is coming to the terms of the equity split based on negotiations. You should be thinking about what your co-founder wants, even when they lose sight of their long term interests  It is normal that founders are hesitant in being generous with the equity split.  However, by  implementing methods such as a vesting and cliff period you should have no problem in gaining the trust of your co-founders.  A Vesting period is when an employee only receives partial benefits gradually over a specific period. A cliff period is when the employee only receives the benefits after a specific time.

2. Using a 1 year cliff with 4 year vesting

Most co founders do not understand the long-term time commitment that is a start-up. You need co founders that you can trust to be there for a long term period. That is why by introducing a 4-year vesting with 1-year cliff, you can guarantee their loyalty to the start-up. Even if they leave they will not be entitled to their full share of equity. A 4-year vesting period with 1-year cliff means that the co-founder will only begin receiving their equity stakes 1 year later. After the 1st year, the co founder can receive a quarter of their equity share every year for 4 years. They are only entitled to their full shares once they dedicate at least 5 years to the company.

3. Long term commitment

By implementing this hedge, you do not have to worry about choosing the wrong co-founder. You will have at least 1 year before they can receive any of their shares. After that, the co-founder will only receive their full shares of equity if they committed 4 years to your start-up. This is a minimum 5 year commitment which is enough time to grow your start-up. If they do not agree to the 4-year vesting period with the 1 year cliff, it means they are not willing to commit and should not be a co-founder.

Once you have this hedge in place, it should be easier for you to be generous in splitting the equity. The co-founders will be entitled to their share once they commit at least 5 years with you. You want to make sure your co-founders are willing to put in the same amount of time and energy that you are. The equity split will be the motivation your co-founders need to get through any challenges your company will face. Having this trust between you and your team is key in order for your start-up to become successful. There is no exact number of what the equity split should be. it depends entirely on what expectations you have for your co-founders.

25Feb
Investing in a sustainable future: CoPower

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CoPowerCoPower is a company that is bringing new innovative solutions to the clean energy market. The planet that we call home is dying at an exponential rate and we need more people coming together to bring solutions to create a better, cleaner world. Copower is doing just that by providing financing to clean energy projects across Canada. We sat down with the co-founder of Copower David Berliner to discuss clean energy and building a business.

  1. What does CoPower do?

CoPower provides financing to clean energy and energy efficiency projects across Canada. We do that by raising green bonds from individuals and other investors to make investments on the environment. We put the planet in our portfolio and we do that by using a digital platform. So far, we have raised over 25 million dollars in loans to go towards community projects.

  1. What inspired you to start CoPower?

I have always had an interest in the environment. When I finished my masters, it was almost a natural course for me to continue working in clean energy. I wanted to bring new innovative solutions to the clean energy market so we can create a cleaner, more sustainable and better world to live in for the future generations ahead of us.

  1. What was your goal when you created CoPower?

When we first started CoPower we had two goals in mind. The first one being to grow the company as big as we possibly can and raise the most amount of loans for clean energy. The second thing we aimed to do was grow the clean energy efficiency market by bringing new solutions to the table. We wanted to show people that they could easily have a positive impact on the environment while also getting a return. We wanted to grow the business but also grow the market to raise awareness and inspire others to do the same.

  1. Were there any major changes the company had to go through?

We were constantly making changes in the beginning. Our first business plan talked about connecting clean energy products with investors via a platform. Over time, we had different iterations of what the right product would look like. We had one main idea in mind and that stayed the same throughout the vetting process. What was constantly changing was how we approached that main idea. It was constantly evolving.

  1. What was the deciding factor that pushed you to starting CoPower?

It was not one moment, it was a series of decisions that lead up to this point. We first had the idea and I then discussed it with my family and other entrepreneurs I knew. I tried to share my idea with as many people as possible to get their perspective on it and to validate it. I was nervous at first because I did not know if this was a good idea or not. Its scary trying something you have never done before because there is a constant fear of failing. Organizations like PME were there to encourage us and be our early on supporters. PME was the first place we submitted a business plan too because we had to meet a deadline. This was extremely valuable because we were then able to get feedback and constantly evolve our ideas to grow it into the business it is today.

  1. What is the number one advice you would give to other entrepreneurs like yourself?

Surround yourself with the right people. Wither it be mentors, advisors, coworkers, family etc. There is only so much you can accomplish by yourself. You need to have the right people around you to help you through challenging decisions or personal conflicts you might face. You should not try to deal with everything by yourself because it’s going to be overwhelming. Having the right people around you that will support you but also challenge your ideas will allow you to grow your business and evolve your ideas. Make sure your team is consisted of people you trust and get along with. These are the people who you will be spending a tremendous amount of time with and the people who are going to be responsible for building your vision.

  1. What kind of risks did you need to take

As a founder, you always need to take calculated risks. The first biggest risk we took was joining PME. In the early stages of developing your business the uncertainty of wither,  the business will succeed, or fail is one of the scariest things. Once you get past this and take the big step forward everything else will follow. After that, we started taking one small risk after another. It’s not about taking huge leaps but small steps and taking one tasks at a time in order to move forward.

  1. What were the biggest challenges you faced and how did you over come them?

The biggest challenge I faced starting out as a founder was not feeling confident in what I was doing. I was new at this and it was a scary feeling. It was more of a self-reflecting one but having a network of people you can share your ideas with helped a lot in boosting my confidence and pushing me in the right direction to start CoPower. Discussing your ideas and gaining insight from different perspective is extremely beneficial because it will help you validate your ideas and give you that push you need to start your own business.

Starting your own business is not easy. It’s very scary trying to create something all by yourself. Getting past this fear of failure is a big step that every founder needs to make in order to get things moving. Getting feedback and asking for help from the right people will help you evolve and ignite your ideas giving you the push you need to start your own business.

12Feb
How to get and test start up ideas

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startup

Entrepreneurs are constantly searching for the big idea that is going to make them successful. There is a misconception that in order to start a business you initially need a great idea to start with. Rather than looking for ideas, you should be looking for problems and coming up with solutions. Stop brainstorming for weeks for an idea and start identifying problems that already exists. Brainstorming for solutions is so much more valuable and an efficient way to get a startup going. What is even more valuable is if you have a personal connection to this problem. Is this a problem that you, your family, your peers or even your community faces? Having this personal connection to the problem will be extremely advantageous to you. It will give you that drive and motivation that every entrepreneur needs to get a startup going and you’re more likely to offer a unique perspective. By having a personal connection, you will be able to identify if the solution you propose something that is somewhat viable.

Brainstorming

Brainstorming with friends is the perfect opportunity for you to start thinking about cofounders you might want to bring on. Finding people you can effectively trade and build ideas off is the perfect step to finding a cofounder. You will be able to identify how you work with them and if you get along well right away. Ideally, your cofounder should be someone you get along with and share the same values and goals. Brainstorming together will give you a taste of how you can work and build with them. Sharing ideas with friends is not just a good way to find cofounders but also an efficient way to find a problem, hear their thoughts, and get some validation.

Research

Once you have found a problem, try to think what kind of unique perspective you can bring to the table. It is helpful to research what other solutions exists and compare them to any ideas you might have had.  Identify the failures in the solutions that already exist by competitors. Evaluating what possible competitors are out there and determining how their solution can differ from yours can allow you to bring new ideas to the table that nobody else has done. How can you offer a unique perspective from the solutions that are already out there.

If a solution to your problem does not exist, then you should ask yourself why there is not already a solution. It might mean that your problem is not something that affects a big enough market meaning you will have to go back to brainstorming.  This is where having a personal connection can give you another advantage because it might help you look at the problem in a way that nobody else has seen it. What can you bring to the table that somebody else has not tried?

Don’t get Attached

It is important to remember the first solution you come up with or prototype you build is only the first step. Never become attached to your first idea as changes and adjustments are bound to be made, it’s part of the process. Never fall in love with the idea but fall in love with problem and the customers. Know that there is always room for improvement and do not treat your solution as the final product.

29Jan
What’s next once you have your million dollar idea?

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business ideaEither you have been racking your brain for weeks trying to come up with a business idea or a struck of genius just came to you. Regardless of how it came to you, you believe that this is the business idea that is going to make you an entrepreneur! Great, now what?  You are probably very excited to get the ball rolling and you have so many different thoughts going through your mind. It becomes little overwhelming as you don’t know where to start or how to start. How do you start taking action in order to create your dream into a reality? Here’s how! Read carefully as we will give you some guidelines that will help push you in the right direction.

  1. Tell people about it

There is a common myth that you should not tell your business idea to anyone. This is false. The first thing you need to do is reach out to your network and share this business idea with as many people as possible. Now, we didn’t say give away your IP or secret sauce, we said talk about it with people who you think would have the same type of problem like you. Getting insight on your business idea from a different perspective will be very informative. By sharing your idea and getting the opinion of other people you will be able to see if what you’re doing has any depth and does it even make sense. Ideally, it would be great to find a mentor or someone with relevant experience but you can also share your business idea with just about anyone. You can share it with perspective customers and see if they would be interested in using your product/ service. Any form of constructive information helps. Talking about your business idea will be extremely beneficial and can easily be done to take you one step closer.

  1. Research

Do your market research. What need does your product or service meet? How is that need currently being serviced? Who are your competitors? Find out what competitors exists and who they are. Research each one of them and find out how your business idea differentiates from theirs. Why would your product or service be superior form everyone else on the market? You need to be better than the rest in order to make it. If your business idea is something that is not even on the market yet, you should research why. Figure out if other people have attempted this or why nobody else is doing this. Is there is a reason for this? It’s also important to research if this something people will buy or need? There is no point in creating something that people will not use.  Who is your customer? What are the demographics of your customer?  Why would they buy from you? Do you have any evidence that they will purchase your product/service? What differentiates your product/service from the competition? What are the strengths or weaknesses of your product/service?

  1. Draft a business plan

Once your market research is complete and you have validated the need, it’s time to write your business plan. A business plan is a written description of your business’s future. In essence, it is a document describes what you plan to do and how you plan to do it. This might seem like a long boring task to do however, it will prove to be very beneficial. At the beginning, it does not need to be elaborate it’s just a good idea to write everything down to organize your thought process. Writing everything down will allow you to see the big picture and put things into perspective. This will enable you to ask yourself the important questions. It is also good to have when you need to refer back to it. It’s hard to keep track of everything when you don’t write it down. Creating a business plan will also help you when you decide to start pitching later on to investors or even just too potential business associates to gain their help in your project.

  1. Prototype

Start building/ designing as soon as possible! Start making sketches, templates, designs. The quicker you start putting something together, the faster you can start getting feedback to improve your original design. Your original idea is never going to be perfect, there will always need to be improvements made and this can only be done once you start actually putting it together. Building a prototype will put your idea to the test. The faster you can get it out, the faster you can bring this idea to market. Today’s world moves quickly, so you want to be able to be the first to do it before any one has a chance. The more feedback and criticism you get, more improvements can be made to obtain a better product outcome.

5. Funds

Start saving your money! In the beginning, it’s best to invest your own money into your project or use money from friends and family. When you are just at the idea/prototyping stage you still have a lot to do and adding in investors will only cause you more stress and pressure. You might underestimate how much money you will need to pour into this project so save and spend wisely.

I hope that this guide has given you some structure on where and how to start once you have your million dollar idea. Taking action on an idea is the most challenging and intimidating part. However, if you really believe in the business idea and your capabilities then the possibilities are endless. Start by taking small steps in the right direction and slowly things will come together. If you have the passion and drive to keep you going then nothing else will stop you in creating your dream into a reality!

18Dec
The Ultimate Startup Gift Guide

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Hello,

Are you looking to kick-start your startup? PME wants to ensure you are equipped for the startup life. We have compiled the ultimate guide for you and all of your ambitious friends this holiday season.

We all have that friend who is anxiously planning for the future and foresees his startup making millions of dollars. In order to get the ball rolling, check out Ted Talks and partake in all of their wisdom. With enough information, you will surely conquer all the VC’s in Montreal. However, when you are at that big meeting, ensure that your pitch makes the cut by reading our guide to creating a perfect pitch deck beforehand. For all you data junkie out there, ensure you understand your metrics and watch your e-commerce soar!

We will be taking a holiday break at ProMontreal Entrepreneurs and will return with more exciting events and news in January. Wishing you a relaxing and restful holiday.

P.S. Please refrain from using plastic straws in your eggnog

5Dec
Main and Local: Souvenirs that don’t suck

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main and local, souvenirsIf you have ever been on vacation, you will notice that most souvenirs available are all the exact same generic product. Not something you would want to bring home to your friends and family. A PME funded business, Main and Local put a stop to these awful souvenirs and created souvenirs that do not suck. Literally, their tagline is “souvenirs that don’t suck”. These souvenirs are made from a local perspective and offer a good laugh by incorporating the culture of the city into their products. Now the company has expanded outside of Montreal and has started selling in popular cities across the country.  Co-founder David Prince shares with us some advice on what he has learnt along the way. He also shares with us how he and his co-founders pivoted their company into Main and local.

  1. What inspired you and your co-founder to start main and local? Why souvenirs?

The idea came when we worked on cruise ships and wanted to bring back souvenirs for friends and family. We realized there really was not much option and we did not want to bring back souvenirs that sucked for our loved ones.

  1. How does main and local differentiate from any other souvenirs?

We like to make fun, clever and unexpected products. Our tagline is “souvenirs that don’t suck” and we stand by that. We try to come up with creative ideas for each product we make. Its not only for tourists, it is actually mainly for locals. We make souvenirs but from a local perspective. For example, for Montreal we make things about construction, poutine, smoke meat etc. Tourists understand as well.

  1. Did your company go through any major changes/Pivot?

We went through so many major changes and pivots. It actually took us about a year of brainstorming until we came up with the perfect business idea. We came up with so many different things and finally we settled on licensing for local businesses. Basically the idea was  we would make a product for a local business, they would sell it in their restaurants, and we would sell it in our stores. We pursued that for about 6-9months until finally we realized there were too many issues around it. It did not seem like a real scalable model. Once we realized that, we decided to pivot. So, instead of creating a product about la banquise why not just do poutine and sell it around Canada. Pivoting was a hard decision to make but we were surrounded by the right people who pointed us in the right direction.

  1. What were some of the biggest challenges you faced as a founder and how did you overcome them?

At first, I was very hesitant to quit my steady job and I had many responsibilities at the time. The biggest challenge was leaving that comfort zone and jumping into something completely new. From a financial perspective its hard to just make that kind of jump so make sure you have some sort of savings before you do take the risk because it will drain your bank account. It is definitely a risk worth taking. Being a founder is the coolest thing in the world. You’re not on the sidelines, your future is in your hands and it’s an unreal experience. It is an experience I would never be able to get working for somebody else. You call the shots and the risk is worth it.

 

  1. What is the number one advice you would give to other entrepreneurs like yourself?

Everyday is a roller coaster. It is filled with many highs and a lot of lows. What is important is that you don’t get overly excited when your business does hit a high point because things can quickly change and hit a low point. It’s also important to not let the low points get to you either. Be ready for anything. Its mentally exhausting but you need to adapt and expect it to come. Not a lot of people are able to handle this kind of uncertainty, its really tough. However, as long as you stay focused and persevere, you will be able to make through anything.

  1. What do you think is the most important thing every founder should be aware of?

Expect that it’s going to be really hard. I think most founders might underestimate how much work and dedication that goes into creating a business but it’s really tough. You wont get very far if you expect being your own boss means you can be doing 10 hour weeks and relaxing at home. By being a founder, I’ve learnt so much its insane. I learn more in a week than I would have normally in a steady job. Not only that but you learn so much about yourself and your capabilities. It allows you to push yourself to limits you did not even know you had. Stop procrastinating taking the leap because the longer you wait the more responsibilities pile up. You just need to go for it.

 

  1. How has PME had an impact on your business?

PME is the best thing we have done in the business easily. I do not say this lightly, we really mean it they have been a tremendous help. From a financial perspective but they also gave us the validation that we were on the right path. I can’t say this enough, the mentors who have been helping us the past 4-5 years have been incredible. They would meet with us every week and help us make really big business decisions. These are entrepreneurs that have built multi million dollar companies and getting their feedback was crucial to our business.

Nothing ever goes as planned when starting your own business. There will be bumps in the road and you need to be ready for them. Your ability to deal with the high and the lows is what will allow you to make it to the finish line. The founders of Main and Local never gave up on starting their own business even if it meant they had to pivot. They had the right determination which lead them to creating the successful business they run today.

18Sep
3 most important e-commerce metrics

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e-commerce 

In e-commerce, data is everything. There are so many different metrics to consider it becomes overwhelming. That’s why we’ve narrowed it down to the three most important e-commerce metrics that you need to pay attention to. E-commerce has become very popular over the years, especially with the rise of social media. When you are new to e-commerce, your time is usually spent on binary decisions and tasks that help you get closer to launching your business. For example,  what products you want to sell, who your audience is and how you are going to reach them. You build a website, put the right tools in place and create processes for shipping and fulfillment. However, beyond post-launch date, you will need to step up your game and quickly evolve from business builder to data analyst. Although it may seem like the easier route to take, there are a lot of important metrics to consider and analyze to ensure the success of your business. Here are the three most important metrics that matter.

1. LTV:CAC ratio

The customer lifetime value ( LTV) to customer acquisition cost (CAC) ratio is important in calculating how much you should be spending to acquire a customer. It can help you identify if you are spending too much or not enough on marketing strategies. You can then find solutions to increase profits and revenue. First, we will define both customer lifetime value (LTV) and customer acquisition cost (CAC).

Customer lifetime value (LTV)

Customer lifetime value, or LTV, is one of the most important metrics to track in e-commerce. LTV is the total you earn from a customer over the course of their life. For example, if a customer makes five purchases over there lifetime that was 30$ each then the LTV would be 150$. LTV helps you understand how much profit you earn during the average customer lifespan. Knowing the lifetime value of each customer you acquire can help with forecasting, budgeting and marketing strategy.

Customer acquisition cost (CAC)

Customer acquisition cost ( CAC)  or customer acquiring cost is the amount of money spent on acquiring a customer. This value is calculated by taking the expenses that were used on acquiring customers and divided by the number of new customers that were obtained over that given time period. Knowing your CAC is important because it can help you decide how much money you should be spending to acquire new customers each month.

2. Page speed / load time

This metric is extremely important and can be easily overlooked. Just a one second delay can have detrimental impacts on your business. Pay close attention to page load time on your website. Page load time, or page speed, refers to the average number of seconds it takes for a page on your website to fully load for visitors. A slow website can negatively affect user experience, your ability to build trust and your likelihood to convert new visitors. It can also increase your bounce rate. Your bounce rate is the percentage of visitors who arrive on your page and leave before taking any other action.

According to a Financial Times Case Study, a 1 second delay results in a 7% reduction in your conversion rate. Your conversion rate is the percentage of customers who buy something once they visit your site. It takes as little as one second to slow down traffic on your website not to mention, take a toll on your brand. A customer research report indicated that 66% of people said that website performance influenced their impression of the brand. While 35% of people reported they are less likely to shop there again due to poor website performance. Since you do not have the opportunity to meet your prospective customers in person,  your website is your primary tool for creating the right first impression with people.

Page speed directly affects both conversion and brand but will also affect your search engine optimization (SEO). Google has stated that they use site-loading page as a factor in the algorithm for ranking sites. Therefore, if your site has a slower loading page it will become less visible to customers when they use google search engine.

3. Revenue by channel

When you are spending money on different marketing tactics, it is important to know what is bringing you the highest conversion. Whether it be from social media, email opts or advertisements it’s key to understand what is fueling business growth. This way if you are generating higher conversion rates from advertisements on social media as opposed to sending out emails, you will want to focus more of your marketing strategies on advertising on social media.

To build a profitable and sustainable e-commerce business, pay attention to the data. Having a firm understanding of e-commerce analytics will help you become successful. You should be obsessing over these analytics as it reveals the current state of your business. You need to be constantly looking to improve the data. However, do not be overwhelmed by the numerous different metrics that are available focus on these three main metrics especially in the early stages of your business.